Posted
by
Soulskillon Friday July 03, 2009 @11:05PM
from the virtual-madoff dept.

djconrad was one of several readers to point out the latest major scandal in EVE Online, the space MMO notable for its large, player-driven economy and the entertaining stories it often generates. A player named Ricdic, chairman of a large in-game bank, decided to embezzle roughly 200 billion ISK (the game's currency). Ricdic exchanged the ISK for about $5,000 to pay off real-life debts. Massively has an in-depth write-up about how the theft affects the game and its players. Since the scandal became public, there's been a run on the virtual bank, and its executives are doing what they can to reassure people that it will continue to exist. Ricdic was banned, not for the embezzlement, but for trading 200 billion ISK for real currency, which is forbidden by EVE's EULA.

Either way, I don't know why this is surprising except for one fact: That it didn't happen much, much sooner. That's what happens when there's no real world consequences for your behavior (or you think you can avoid them).

Either way, I don't know why this is surprising except for one fact: That it didn't happen much, much sooner. That's what happens when there's no real world consequences for your behavior (or you think you can avoid them).

That's not surprising. It happened before and it will happen again.EVE has a very rich history of large scale scams, reaching from investment scams like this one to long-planned infiltrations of alliances like the infamous heist [klaki.net] by GHSC (who incidentally ripped assets to the tune of 200ish billion ISK off one of the major alliances again just recently [eveonline.com]).

The only "surprising" and novel bit about this story is that he apparently/supposedly didn't do it for the e-fame or e-gain, but for RMTing the scammed ISK because of real life troubles, which was the reason for his subsequent banning.

The basic problem is that he was able to convert the in game currency into a real world currency.plenty of people want to get ahead in MMOGs for some reason (maybe they just want to play with the higher end stuff, maybe they enjoy being "better" than others, whatever) but can't or don't want to put in the time that it takes (most MMOGs reward those who spend insane ammounts of time ingame) so they buy ingame currency off some site on the internet.

I don't know why this is surprising except for one fact: That it didn't happen much, much sooner.

Because people are inherently honest. Dishonesty is an abnormality. Even in this case, it took $5,000 in immediate real life needs for this person to cause harm in a video game to a fictional economy, and the only punishment is that a few ones and zeroes got flipped around so they didn't like a few other ones and zeroes anymore. It's this very fact that pisses game theorists off to no end -- agents in the system continue to act completely irrationally (ie, to trust) when the rules clearly indicate every advantage for the "cheater" and next to no consequences.

Trust is inherently illogical and irrational and yet it works. Society is built on networks of trust -- most of our institutions and infrastructure that allow life to go on the way it does right now depends on the vast majority of people playing by the rules. Rules which, for the most part, are arbitrary. There are very few rules that are "naturally derived" -- For example, not murdering people is a naturally derived rule because we can't exactly make going extinct legal. O.o Traffic laws are, for the most part, arbitrary -- red means stop, green means go, drive on the left (or right), etc. But we'd never be able to use the shared public resource (the highway) without them.

Human beings are social creatures. In order to survive, we have to trust one another. Every social organizational structure is derived from this basic concept -- it simply varies in how we trust, to what degree, and to whom.

Trust is inherently illogical and irrational and yet it works. Society is built on networks of trust -- most of our institutions and infrastructure that allow life to go on the way it does right now depends on the vast majority of people playing by the rules. Rules which, for the most part, are arbitrary. There are very few rules that are "naturally derived" -- For example, not murdering people is a naturally derived rule because we can't exactly make going extinct legal. O.o Traffic laws are, for the most part, arbitrary -- red means stop, green means go, drive on the left (or right), etc. But we'd never be able to use the shared public resource (the highway) without them.

Human beings are social creatures. In order to survive, we have to trust one another. Every social organizational structure is derived from this basic concept -- it simply varies in how we trust, to what degree, and to whom.

If you think about it from an evolutionary point of view, trust is an excellent adaptation for a social species. Being trusting is the sort of thing that might not work so well for a given individual but works out for the species in the long run. It's like cuteness. What's the evolutionary purpose of finding creatures with infantile features and proportions cute? Easy: it's so we don't murder our young. If those little darlings didn't worm their way into our hearts at first sight, it's for damn sure they wouldn't make it through the third night of random crying, feeding, and diaper changes.

Of course, it's always possible to push the boundaries of society to the point where people stop trusting. We're in danger of this very thing right now. I mean shit, there's a lot of trust involved in working for two weeks with the understanding that there will be a paycheck on payday! I've seen smaller companies so fucked up that the boss has to pay on a weekly, sometimes daily schedule because people don't trust him. We're seeing that in the economy at large as the expectations of the common citizen have become more and more cynical through time. Republicans exist to fuck the poor to death. Democrats exist to pretend to be an alternative to getting fucked to death and while they're taking no direct part in the rape, they're standing in the corner stroking their puds while the Republicans go to town.

Once that social contract is broken, all the scotch tape in the world won't put it back together again.

If you think about it from an evolutionary point of view, trust is an excellent adaptation for a social species. Being trusting is the sort of thing that might not work so well for a given individual but works out for the species in the long run.

Except evolution acts on individuals, not species. In order for trust to evolve, individuals must gain benefit from it.

It's like cuteness. What's the evolutionary purpose of finding creatures with infantile features and proportions cute? Easy: it's so we don't murder our young. If those little darlings didn't worm their way into our hearts at first sight, it's for damn sure they wouldn't make it through the third night of random crying, feeding, and diaper changes.

It's so we don't eat our own children, which would remove our genes from the population.

Evolution acts on - or rather, through - genes, behaviors and niches, not species or individuals. If my nieces and nephews prospers because of something that's in my genes, and I don't reproduce, then my parents' genes have done better by producing me than they would have if they didn't. Think how few ants and bees reproduce, yet how successful they are as species.

I mean shit, there's a lot of trust involved in working for two weeks with the understanding that there will be a paycheck on payday!

That's actually an interesting point. I have a salaried job where I am paid monthly IN ADVANCE. So my first day on the job I was immediately handed a nice big check. In all my years working I've never encountered anything like it but I admit while I have "better" job offers come along every so often I can't see going back to biweekly after the fact paycheck.

That's true to a certain extent, but I would add a large caveat. People are honest when they know obeying the social norms will be rewarded, and there is a real chance of being caught or punished for their dishonesty. Most people don't steal, but if a situation like the article describes occurred in meatspace, people would be stealing like crazy.

The trust can't co-exist without strict societal rules that reward cooperation and discourage

But being selfish sometimes makes you more likely to pass on your genes as well. So while we are social creatures, that doesn't mean people aren't looking for an opportunity for personal gratification at the expense of others. We all intuitively know this. I mean you've seen people, right? It's not like assholes don't have kids.

I think people mostly go by what they perceive as the norm. In other words, "Locks keep an honest man honest". If you perceive yourself to be in a loosey-goosey, anything goes situation, you'll do what you see everybody else around you doing.

In real life, a reputation follows a person. No one will invest in Madoff anymore. In the game, a reputation follows the username. If the game does not allow username changes, then being dishonest would adversely affect the cheater's game play, which means cheating/punishment is _a part of_ the game. People probably were no longer willing to play with Ridic anymore. In games like Counter-Strike, if a person does not cover you in one round, then you remember the name, and no longer trust him to cover yo

That theory doesn't hold water in other games that have smaller subscription fees (such as RS).RS (as an example to the extreme), has an economy that is almost built off currency and prices generated or affected by Pump-And-Dump clans, mage-boxing, account stealing, trust trading, player luring, and public price manipulation.

The biggest reason for this, in my opinion, is that while EVE has a subscription fee of 15$/month, RS can be played for free or have additions for 5$/month. With pre-trade restriction p

The problem is, there IS actually no real consequence. What is the consequence? The account was banned. That is a consequence... how? Sure, the average gamer would probably be a little shocked, a few years of his life down the drain, but someone whose goal is to con? He doesn't play anyway.

It's also not a safeguard against never doing it again. He could just hire someone to make an account for him.

But they don't appear interested in having real world laws used against the guy.

That's because he didn't break any real-world laws. He violated the terms of service for the game. All that means is that they won't let him play anymore. There's no law against taking real money in exchange for a minor data modification (setting a variable to 200,000,000) that's utterly inconsequential in real life.

Should it be illegal to scam people in the game ? As I understand it - this is part of the game, scamming people....Then he broke the EULA - and they kicked him out of the game... Any real world consequences are not justifiable in my opinion.

What I don't really get is - why the buyer isn't kicked out as well... surely 200 billion ISK in EVE can't be that hard to trace... or do they have money laundering services there ? How on earth would they work in a log-all virtual world.

CCP warns consistently that they track all ISK transfers and once they come down on an ISK-seller, all the money he ever traded is not only gone, but replaced by the same figure with a "minus" in front of it. If you bought a lot of cash it could mean you'd be bankrupt on that character.

I'm not sure how often CCP exactly does that kind of thing, but in this case they have a pretty good incentive to come down hard on the sellers and buyers.

I'm not really sure why this is newsworthy again. There is a massive bank scam or other fraud or corporate infiltration every couple months in EVE-Online going back a number of years, now. It's a part of the game and happens regularly. Space is a cold and hard place.

Well, you have to fill out your personal details, like your real name and where you live to get an account, so presumably they can find all accounts and ban them that way. Also, from what the guy stated, he doesn't want to play anymore. Remember that he exchanged the in game currency for real life currency, which is the whole problem. Otherwise the scam is perfectly within the rules of the game and had it only been for that, he could have continued to play the game.

EVE continues to be an interesting study in politics and intrigue but I will forever fail to understand its appeal as an MMO. I've tried playing it - it totally does not appeal to me in any way, what-so-ever. It was about as dreadfully boring as a game could possibly be without being nothing at all. In my opinion. But, its political backstabbings and manipulations of its systems sure as hell generate some interesting stories... Intensely interesting and dreadfully boring at the same time.

EVE continues to be an interesting study in politics and intrigue but I will forever fail to understand its appeal as an MMO. I've tried playing it - it totally does not appeal to me in any way, what-so-ever. It was about as dreadfully boring as a game could possibly be without being nothing at all. In my opinion. But, its political backstabbings and manipulations of its systems sure as hell generate some interesting stories... Intensely interesting and dreadfully boring at the same time.

Perversely enough, those are exactly the play mechanics they wanted to emulate.

MMORPG's are weird beasts. On one hand, it doesn't feel like an RPG because nobody is in character, nobody is playing according to the setting's fluff. It all feels like a bunch of game geeks dorking around on a video game. But on the other hand, these seemingly average, real-life people can be anything but. I'm not just talking about the mild-mannered high school mathlete who becomes a griefing dickhead when he gets online, I'm talking about the people who work out the elaborate con jobs. There was one massive screw-job that took over a year to plan and execute. You don't really know anyone.

I played EVE briefly and am firmly in the carebear camp. If a game is any bit more complicated and involved than an FPS deathmatch, I'd prefer to be playing as a team rather than in competition.

The time it takes to put into a game like this, to get anywhere, to pull off these virtual coups, it's mental illness in a can. We're talking obsessive behavior, unhealthy commitments of time not seen outside of stalker/murderer ex's and the terminally ambitious.

"Metagaming" is thicker in EvE than in any other game out there, mostly because your chance to impact the playing experience of other players has never been higher. EvE is a social-economic experiment of sorts, a lot of the experience you have depends on the interaction with other players.

Of course, if you're not into that, there are few MMOs out there that could be any more boring.

This learning curve [wordpress.com] may explain why EVE is so intimidating / boring.

Anyway, once you get into it its actually a great game. Perhaps you have to have liked playing Elite back in the day to appreciate it. It's a massively online version Elite. Aside from all fighting you also get the politicking, scams, crimes and so forth that make the game world hugely dynamic.

Isn't the idea of a game to escape reality, not have it mimic so flawlessly the errors that exist in reality so heavily?

That, or the fact that you can be a bastard as much as you like. I no longer play Eve, but it was great fun camping at a gate waiting for a good mark to blackmail. Oh, I could tell you stories of people that came after me with a bigger ship, and how I'd blackmail them again, or how they would bring more friends than I could bring and I'd have to run and wait until they got bored with chasing me around the nearby systems.I could tell you about how I once infiltrated a small corp with an alt and cleaned out their hangars, and the smile on my face as I sold some of it back to them without them realizing. Oh, I escaped reality alright. I got to be that very person you should never trust, and I've had so many insults thrown at me that it still makes me smile whenever I fondly reminisce those days;

That was the fun in Eve for me. Some like to build large empires to wage war and play politics, others like to spend their time gambling on the markets, and some just like the idea of wearing an eyepatch shouting "ARRRRRRRR".

Eve is one of the few games where I often reconsider playing it again, but it just wouldn't be the same without the gang of friends I used to annoy people with. That, and the considerable amount of time it would take away from other hobbies I've picked up since.

You might think I'm being sarcastic but really. Each time I read one of these stories about an Eve problem I only want to play the game more. I've played other MMOs and having full banking institutions, investments, and companies exist is within its self very rare.

I mean all games have some kind of monetary system and by extension a way to trade money for goods. But very few are able to recreate the real world so closely.

Take for example World of Warcraft, you have gold, and you can trade. But you'd never have real businesses exist because the game just doesn't work that way, let alone banks.

The reason eve fails is BECAUSE it replicates the real world too well. When you "play" Eve, one gets the distinct feeling that one is actually not playing a game but doing work. The feeling of the drudgery of work.

Maybe CCP will learn from the financial crisis that a utopian hypercapitalist world is not only a fantasy world, it's not all that fun.

Those, and other tedious work can be fully automated, or at the very least break it up into much shorter shifts. so the creative work would be designing the machines to do it. Believe it or not, it takes a lot of effort to make a job as miserable as possible, and the reasons for it are very easy to see. It serves to distract people's attention away from from those who actually make the work so odious. And another thing, am I being told that because utopia is "impossible" to achieve, I should just shut up an

The system of monetary exchange already provides fully and completely for the automation of tedious tasks. For example, putting wheels on cars, putting beans in bags, creating pencils from wood. The world has a pool of labour and a stream of output, and the sum of the latter equals the standard of living (although not equally distributed). Monetary exchange imperfectly but quite regularly pushes towards the maximisation of output given the available labour by reallocating whatever labour is available to whe

Nice handwave. You've clearly never tried to develop a fully automated system. But hey, since they have robots building cars, it must be easy, right?

or at the very least break it up into much shorter shifts

So when the septic tank needs pumping out, and it's the database engineer's turn to run the pumper, we just let the trained pumper try to manage the database? And we let the DB engineer try to operate a solid waste pump? I love you cartoon communists. You all seem to think that unpleasant jobs require no skill or training, and that everyone can just take turns

The reason eve fails is BECAUSE it replicates the real world too well. When you "play" Eve, one gets the distinct feeling that one is actually not playing a game but doing work. The feeling of the drudgery of work.

Maybe CCP will learn from the financial crisis that a utopian hypercapitalist world is not only a fantasy world, it's not all that fun.

I have to disagree on that one. EVE is what you make out of it. You can do tedious and boring stuff like run an industrial enterprise (aka Spreadsheets Online), mine asteroids (mindnumbingly boring), do PVE (which is admittedly terrible in EVE) combat or you can go the PVP route (be it as a pirate, mercenary, grunt in one of the major power blocks or declaring war on carebear corps for "protection money") and blow up other people's pixels leading to tasty bitter tears for your drinking pleasure (complete loss of whatever you're flying when you get blown up can lead to amusing smack talk).

Or you could do something completely different and do the social engineering and scamming (completely accepted by the TOS as long as you stay within game mechanics) that keeps EVE in the mainstream news.

It's a sandbox, there should be something in it for you to have fun with as long as you can befriend the general gameplay, setting and the UI (which is constantly improving) surrounding it.

One or two of the very few married EVE Online players in the world spent $100 of their household's real life cash to buy a freighter in-game only to have it stolen from them and then some other real life bill didn't get paid and then they faced their wives' wrath and as Porky Pig once said... badebadebadethatsallfolks!

Its not all that fun to *you*, but I can perfectly see how a young economist or a math undergrad studying game theory may find it fascinating.

Personally, if it didn't have monthly fees I'd probably be playing it now, the concept sounds interesting to witness at the very least, if not to experience it by oneself. Though I hate scamming and PKing so I'd probably be nothing but a bum in there.

Right, with meatspace banks a combination of regulation and the banks internal checks and balances to protect thier reputations means that the chance of getting your money stolen by the bank or thier employees is pretty low. The risk of the bank going bankrupt is basically removed by the goverment covering that eventuality. Security breaches do happen but when they do the bank will nearly always refund your money and pass details to law enforcement/try to reverse the transaction.

Your money is only guaranteed by the government/central bank up to a certain amount (was 20,000 euro per bank recently upgraded to 100,000 euro), as people found out the hard way a couple of years ago (before the current crisis) when a small bank collapsed and people lost most of their live savings.

In the current crisis there was something with ppl who where saving in an Icelandic bank that collapsed.

Like in eve online you should scatter your money around multiple banks, especially if you have more money th

I'd like to take a minute to address concerns over EBANK's solvency, that is, it's ability to pay out withdraws. As I mentioned before, EBANK moved a large portion of it's assets into cash and we've been merrily burning through it today as people have drawn their money out in concern. We also haven't had deposits coming in - so the money is only flowing in one direction....out.

That's ok.

We still have enough cash to handle withdraws and as of the time I write this; withdraws have been actioned. I would also like to point out a few other things; we have had many persons asking when they can deposit money again, as a show of support and to provide EBANK with an infusion of cash. On top of this, we have had private loans offered to us totaling 100 billion and if we really have to....we still have the ability to issue a Bond or if really required, we may finally launch an IPO.

Why am I pointing this out? I want to provide assurances to our customers that your money is safe with EBANK. We are solvent and continue to build liquidity even in this challenging environment. Even if we have a solvency issue, we have many options at hand to address that should it arise.

Again, thank you to those who have expressed support.

I don't play Eve anymore (purely out of regard for personal time management), but I've read many statements like the above of business dealings in the game (not necessarily about scams, just straight business). What I'm always struck by is that if you're capable of finagling all these things in the game, what's stopping you from doing it in real life?

When this thought first struck me, I was making plans to run an in game POS as a business, and had produced a full business plan and profit analysis spreadsheet. Which is exactly what you'd expect to need at the start of a real business.

Supply and demand, buy low/sell high, and negotiations are all key skills in running a business in the game, but no more or less than they are in real life. Real life has a lot more government regulation (CCP takes a largely hands-off policy as long as you're not trading ISK for real money), but as long as you can navigate that, you'll have the skills you need for a real business, too.

If you're Icelandic, it's not a problem. IceSave deposits are guaranteed by the government. If you're not Icelandic, and you transferred your money into a foreign bank, well, you might just have a problem. It seems the UK government is of the opinion that all deposits should be insured while the Icelandic government disagrees.

If the per-capita fraud/scam/bank collapse rate in Eve Online were extrapolated to the real world there would be an IceSave level incident at least every twenty minutes or so.

EVE moves faster than real life, being a game, getting a basic income is easy through a variety of means (mining, piracy, manufacturing, bounties and, in this case trade). Proper management of capital can trivially have returns of 10% a month with almost no work or 100% in a few days on the market with a lot of work.

This is coupled with high risk, but it's in game risk. Even wiped back to 0 you can recover back to 'normal player' levels radiatively quickly. If you took the kind of risks that are normal in g

There are a lot of Madoff's in EVE, but at the same time, most of the 'scams from the beginning' are identified before any isk goes into them (this doesn't STOP isk from going into them, some people just don't listen). As there are no (internal) laws, everything is about trust, reputation, collateral and audits. Setting something up that will pass muster with the marketplace crowd is a lot of work, and general requires mechanisms being set up that limit investor risk.

I was, and still am, a consultant, which is technically a sole proprietorship. Leaving the game helped me spend more time on that.

Within the game itself, the POS plan didn't take off. Common moon resources (which are mined by POSes) had their market flooded by alliances who setup POSes for territory purposes rather than profit, and the less common resources were already snatched up.

I'll also add, this is why I don't play video games much any more........real life is so much of an adventure that games seem less exciting in comparison. They are fun, but compared to what I can REALLY do.....

Man, I'll tell you what, Eve online isn't in outerspace, it's here on earth. Not only that, it's displayed to you on a monitor that you can hold in your hands, limited color, and doesn't even fill up your entire frame of vision. A good portion of the fun is in your imagination, and what you do with it.

And yet, the same is true for real life, except real life is infinitely more varied and interesting. As for the graphics, go out and look at a mud puddle sometime, blowing in the wind. You will see more

There are a couple of things that make starting a buisness in real life harder IMO.

1: giving up the day job to start a buisness is a pretty risky move, especialbly when that day job is the only thing paying the mortgage that keeps a roof over your families head. Starting up a buisness without giving up your day job is pretty hard because you will most likely be in your day job during "buisness hours"2: most buisness require capital to start. You can possiblly borrow some in the buisnesses name but much of i

Remember the big flap with Second Life banks when Ginko Financial failed? [wired.com] They had a real bank run in Second Life, with avatars crowding branches demanding their money.

Linden Labs then banned all "banks" in Second Life unless operated by a regulated real-world financial institution. A few real banks established a presence in Second Life, but most (maybe all) have given it up by now.

The problem with banks in a virtual world is that what banks really do is sell loans. It's hard to collect from an avata

Loans are EBANK's bread and butter. The loans are mostly collateralized (there are in game mechanisms for locking resources so they can still be used by a third party but can't be moved) or guaranteed by a trusted party (effectively using their reputation as collateral).

Added to the compartmentalized capital management they have, and no one person can kill the bank, take 200bn? Sure, but that isn't death, just a really big chunk of profit...

Banning Ricdic for making $5,000 in real money from the game will probably result in him making more real money, from real work, in the real world. He might even meet a real girl and have a real relationship and real children. Hardly seems like much of a punishment, if you ask me. If the developers of EVE wanted to punish Ricdic, they'd have given him two more accounts....for free.

Not sure who the bigger fool is, the guy that embezzled all the in-game money or the schmuck that paid $5000 of real money for it.

Try as I might, I can't find a single thing the embezzler did that makes him a fool. He ditched a real-life time and money sink of a habit (EVE Online) and managed to trade it for real-life money and pay some bills. Might qualify slightly as "jerk", but not even a little as "fool".

How... how does that even bring anything to the story at all? Not that its a non-story for anyone not invested/interested in EVE. They don't want people selling in game currency for real world money. Thats how they want to do things. Your comment, at best, is throwaway.